AI can enhance your customer experience
AI offers plenty of ways for you to improve your customer experience from personalised recommendations to chatbots for instant customer support.
It is leading the way in personalising shopping experiences which is good news for retailers, as 71% of customers expect personalised interactions with your brand. AI algorithms can analyse your customer data, like browsing habits and purchase history and offer tailored product recommendations. This helps create a more personalised experience, delivering more of what they like, and less of what they don’t, making your customers feel better understood.
Many retailers are using AI to improve their customer support with chatbots. Chatbots powered by natural language processing (NLP) can give your customers 24/7 support, with the ability to answer routine questions or process orders. This significantly reduces waiting times and offers instant responses at any time of the day and 51% of consumers say they want to interact with bots, rather than humans, when they want immediate service. When it comes to improving overall satisfaction, chatbots are a big win for retailers.
Your inventory management may have experienced significant turmoil during the last four years. Supply chain disruption and a boom in online shopping have made it more important for retailers to optimise and organise their stock. AI tools can help you to predict trends and periods of high demand, optimise your stock levels and ensure you have the right products available at the right time. According to McKinsey & Company, AI-enabled supply-chain management can improve logistics costs by 15%, inventory levels by 35%, and service levels by 65%. The results of using AI for your inventory management mean fewer out-of-stock items, better delivery times, and higher customer satisfaction.
In-store experiences can also use AI sympathetically to enhance customer satisfaction. Retailers are beginning to use AI to create smart fitting rooms where customers can try on clothes virtually and recommend complementary products based on real-time data. AI can also streamline your checkout processes through contactless payments or cashier-less stores.
Finally, the use of AI in your marketing can help you to create more effective marketing campaigns by analysing your customer behaviour and preferences, so that your messaging reaches the right audience. Plus, you can create parallel marketing campaigns for a whole host of different audiences far more easily and quicker than before.
Don’t let AI get in the way of human interactions
But, despite the plethora of benefits AI can bring to your retail brand, human interactions remain crucial to your retail experience. Customers still crave an emotional connection and personalised attention, when they need it, which AI alone can’t provide.
Your employees are vital for building rapport and trust with your customers. The warmth, empathy, and personalised advice provided by your in-store staff builds relationships that lead to customer loyalty.
A recent Intellis Survey and Ipsos Poll demonstrate the importance of retaining the human touch. Two-thirds of respondents in the Intellis survey said it’s ok for AI to handle repetitive tasks, but they don’t want it to replace human interactions. Over 71% of people think the best retail experiences combine AI and human interactions.
While AI can handle routine enquiries, it often comes unstuck when trying to deal with complex queries, especially those that require empathy or nuanced decision-making. 71% of customers would still rather resolve problems by talking to a person. Making sure that you balance the use of chatbots and AI support with human customer service is vital to resolve issues that might be sensitive or have a degree of complexity.
For many consumers, a memorable experience is often shaped by personal touches—whether it’s a friendly hello, a product recommendation based on a conversation, or a handwritten thank-you note after a purchase. These human elements are irreplaceable, so don’t overlook them.
These interactions are also vital when it comes to cultural sensitivity and emotional intelligence. AI lacks the emotional intelligence to navigate certain cultural or personal nuances. Your in-store staff and support teams have the ability to read the room and adapt their responses, making customers feel seen and appreciated. Ongoing training for your staff in these areas also keeps them ahead of AI.
How retailers balance AI with the human touch
Several European retailers are already using AI to complement, rather than replace, their human interactions.
Swedish-based fashion retailer H&M uses AI to analyse customer data and predict fashion trends, helping it to optimise its inventory to ensure popular items are always in stock. H&M also maintains a strong focus on human interaction by ensuring in-store staff are always available to offer fashion advice and personal styling tips.
Meanwhile, German online fashion platform, Zalando, uses AI to provide personalised product recommendations to shoppers based on their browsing history. It also offers a customer service team that includes human agents for more complex queries, ensuring that its customers have access to knowledgeable support whenever they need.
And UK cosmetics brand Lush uses AI for chatbots that handle routine customer enquiries, like order tracking and store location information. But it still places high value on its in-store experience, where staff are trained to engage with customers, offer personalised product recommendations and even explain the ethical sourcing of ingredients in detail.
Achieving a balance
To successfully integrate AI and maintain your human touch, it’s important to focus on creating the best balance between technology and your people.
Your employees should be trained to use AI tools as an enhancement to their roles, rather than seeing them as competition. In-store staff could use AI-generated insights, like product ingredients or ethical credentials, to make recommendations or answer customer queries more efficiently – increasing the likelihood of a purchase.
For many retailers, value will be added within the supply chain so it’s vital to explore how AI can help you manage and monitor your inventory levels to weather uncertainty or periods of high demand.
It’s also important to discover where you can use AI to handle repetitive and low-complexity tasks like answering basic questions or processing transactions. This will free up time for your staff to focus on tasks that require emotional intelligence, creativity, and personal interaction. Using AI for efficiency can help you to bring out the true value of your people.
With that in mind, investing in seamless transitions between AI and your people is important. When customers interact with chatbots or other AI tools, it shouldn’t be hard for them to transition to a customer support person when they need to. This allows your customer query resolution to reach a higher success rate and for your customers to receive the best experience —speedy initial responses from AI and thoughtful, nuanced service from a human.
Finally, keep an eye on customer feedback so that you can ensure your balance doesn’t tip too far one way. This will help you understand how well your AI solutions are performing and how your customers feel about them.
The potential of AI is highly valuable to retailers, but it’s important to focus on balance rather than dominance. As H&M, Zalando and Lush prove, you get the best results when you invest in AI that enhances your customer experience and your ability to improve your processes.
If you want to align with a partner that values the human touch and can balance this with technology insights, speak to our team on +31 (0) 88 494 20 80 or email us at online@worldpack.eu.
